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Now it’s up to the Senate, where the fate of the GOP tax cut for the rich is up in the air.
That’s because the GOP-run House brushed aside workers, seniors and congressional Democrats and passed the tax cut 227-205 on Nov. 15. Every Democrat and 13 Republicans opposed it, while the rest of the GOP voted for it. But the Senate is not in such lockstep.
Over in the House, the Republicans listened to last-minute lobbying by GOP President Donald Trump for the legislation. He succeeded and later crowed on Twitter about it.
The measure, HR1, would send 80 percent of its $1.5 trillion in tax cut benefits by 2025 to the top 1 percent and to corporations. It also would give a green light to further offshoring of U.S. jobs, would eliminate almost all deductions for state and local taxes, mortgage interest, student loan interest and kill the medical expense deduction. It even wouldn’t let teachers deduct $250 to buy pencils and paper – and food — for their poor kids.
HR1 also would cut top tax rates for firms from 35 percent now to 20 percent next year. Few firms pay that high rate. And it would cut top tax rates for the last dollars earned by the rich while raising the rate, from 10 percent to 12 percent, on the lowest-income people.
Whether HR1 can get through the Senate is unclear. The GOP holds only 52 of the 100 seats and needs 50 senators to vote for it, plus GOP President Mike Pence to break the tie.
The Senate version not only kills the entire state and local tax deduction, but blows a big hole in the Affordable Care Act, by dumping the small tax penalty for people who don’t get insurance. That will lead the young and healthy to drop insurance, driving premiums up for everyone else and knocking 13 million people off insurance rolls, the non-partisan congressional Joint Committee on Taxation calculates.
Workers, womens’ groups, older Americans and Dems blasted the GOP’s measure as a “tax scam.”
“This plan is a flashback to the 1980s, when trickle-down economics was all the rage,” said Teamsters President Jim Hoffa. Trickle-down “is now widely agreed to have been a failure, especially for those fighting to make ends meet.
“If Congress wants to provide real economic relief for middle-class Americans, it can start by repealing the 40 percent excise tax on high quality insurance plans. That’s the kind of change that will help those who need it the most,” he said.
“The Republican tax plan is a job killer that will give 50 percent of its tax breaks to the wealthiest 1 percent, while 25 percent of taxpayers ultimately will pay more,” the AFL-CIO said. “Working people pay the price for huge tax giveaways to millionaires and big corporations.’
“Incredibly, the Republican bill would give huge breaks to companies that outsource jobs. Instead of creating good jobs here at home, this bill only will encourage corporations to relocate good jobs overseas.”
“Both versions of the tax plan moving through Congress were already a raw deal for working families,” AFSCME President Lee Saunders said. “The decision to tack on the repeal of the linchpin of the Affordable Care Act adds insult to injury. Not only will millions of middle class families see their taxes go up, 13 million Americans will lose their health insurance – all so the biggest corporations and powerful elites can get tax cuts they don’t need and don’t deserve. Any claim that this tax plan is designed to help working people is an absolute farce.”
“The House voted to cut taxes for corporations and the 1 percent and make working families pay,” Communications Workers President Chris Shelton said.
“House Republicans finally abandoned the pretense their tax plan will help middle-class families. According to the congressional Joint Committee on Taxation, in just a few years, millions of working and middle-income families — earning $10,000 to $75,000 — will be paying higher taxes. Many families will see their taxes increase immediately. Across the board, members of my union and middle-class families will be hurt by this plan.”
Shelton also pointed out tax breaks for individuals – notably doubling the personal exemption – are temporary while tax breaks for corporations and cuts in deductions for individuals are permanent.